CMA to investigate review sites to see if they are misleading consumers

Ever used TripAdvisor to check a hotel or restaurant? Checked out your plumber on Checkatrade? Read a blog that reviewed the latest gizmo? All of the above are the subject of a new consultation by the Competition and Markets Authority on how information in online reviews and endorsements is used.

The CMA (which took over the things previously looked at by the Office of Fair Trading) is asking consumers, businesses and other interested parties to come forward with their views. In simple terms, the CMA, which is “committed to looking at evolving online markets”, has realised that “large numbers” of consumers read and rely upon online reviews when making purchasing decisions. These include sites like TripAdvisor and Checkatrade which do so formally, and blogs that have less formal reviews.

A lot of review sites have been accused of having misleading or downright fake reviews, with stories of hotels offering sweeteners to guests who offer good reviews on the site-as well as tales of customers trying to hold hoteliers over a barrel with the threat of a poor review. The CMA is “aware of a number of potential concerns about the trustworthiness or impartiality of information in some reviews and endorsements that is being provided to consumers” and wants to investigate if there is anything it ought to be doing something about. It is also mindful of the effect negative reviews can have on businesses, and that is why those affected by review sites are also being asked to comment.

To be honest, the CMA isn’t sure what exactly it will do if it finds Things To Be Concerned About, but possible action includes: launching a market study covering this sector, or a part of it; initiating consumer enforcement action; advocating legislative change to government; providing guidance to industry or consumers, or both; and /or seeking voluntary action from the industry. Or doing absolutely nothing.

Nisha Arora, CMA Senior Director, Consumer, said:

The information contained in online reviews and endorsements can be a powerful force in the hands of consumers. Informed consumers make better decisions, driving competition on price and quality. Businesses have always known that ‘word of mouth’ is one of the most important factors for potential customers; what online reviews and blogs do is to provide a greatly amplified version of this. However, for this sector to work well it is important that this information is genuine, relevant and trustworthy.”

More detail is available on the call for information page, and the deadline for responses to the call for information is 25 March 2015.

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Kevin B.

Respectfully, you state, "Both TripAdvisor and Checkatrade have been accused of having misleading or downright fake reviews". Can you tell me on what page this is on as I've read all 71 pages and it's I can't see this statement!
As far as my company is concerned we were invited to share our processes and concerns over the industry, we accepted the invite and spent some 90 minutes talking through our procedures with the CMA.
A lot of what we said as far as our procedures and suggestions go were included in the report which was nice as we know where they came from.
We welcome this shake up in this industry as it is unregulated and many companies are damaged by a lack of respect to those that are being slated via negative reviews. We ourselves are constant victims of the type of feedback the CMA has reported on.
As I've already said, this report is very much welcomed by Checkatrade as we believe the industry (which is unregulated) is in dire straits and that many websites fail to take responsibility for the validity of their publish reviews, which brings a bad name to those that do care and have excellent processes in place.
When I started Checkatrade in 1998 I had in mind that he wouldn’t allow anyone to say anything about anybody without justification or proof. Sadly many sites today allow just this.
As a family business which started with no money or business model to copy we are today the market leaders in not just a brand name but in our processes to try and make sure our reviews are genuine.
Every single one of our reviews is read by a human being before going live. If there is a negative comment everyone is looked into, we make sure “BEFORE” it goes live that the trade knows the consumer and likewise. So on Checkatrade we don’t have false negative reviews. We may have negative reviews that the trades feels is unjustified but we give them the right of reply under the consumer’s comments.
Our issue is not fake negative reviews; our issue is fake positive reviews.
With this in mind we have several very clever technical processes to check the validity of a review received both on line and via a hand filled in card, and we also do the best thing any review company should do, we get on the phone and we call the consumer who has submitted the review. 1 in 10 consumers who submit a hand filled in card are called and when we have 45,000 reviews a month that’s a big commitment.
Needless to say if we discover a trade giving themselves false positive reviews, depending on the circumstances they are dismissed and removed completely from our site or we may take the action of calling all their customers who gave reviews in the previous 12 months, if we find more fake ones, they are at that stage dismissed.
Around 4% of all online reviews never make our website as our checks indicate they may be false. We believe that around 98% of all our published reviews are from genuine customers.
We are the only company in our sector that has voluntarily opened their doors to Trading Standards inspection and scrutiny. This is called opting for a Primary Authority. This costs us money and every month we are audited by Trading Standards Officers. Last month we were classed as "outstanding".
Kevin Byrne - Founder of Checkatrade.